How Big Is Amazon’s Kindle Business? Morgan Stanley Takes a Crack at It.

We’ve already learned not to expect Amazon to divulge Kindle sales numbers, but Morgan Stanley Research is taking a crack at estimating it for us.

In a report released last week, Morgan Stanley said it estimates that Amazon will sell $4.5 billion worth of Kindle e-readers and tablets this year, up 26 percent from 2012.

Growth will slow next year, when the business will do $5 billion in sales, Morgan Stanley estimates, followed by similarly modest growth in 2015, when Amazon will do an estimated $5.5 billion in Kindle sales.

Of course, Amazon is willing to lose money on Kindle device sales to spur demand for its digital content business — the selling of digital books, movies, games and other content — where it makes real money.

Morgan Stanley estimates that Amazon will do $3.8 billion in digital media revenue this year, and that the business will generate more revenue than device sales next year — with an estimated $5.7 billion in revenue.

In total, Morgan Stanley estimates that the Kindle ecosystem — which also includes advertising revenue of $192 million — will account for 11 percent of the company’s total revenue this year, but 23 percent of its operating profit.

Morgan Stanley says that company data and its own research were the report’s two sources.

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